Volvo is now completely withdrawing from the collaboration with the crisis-hit battery factory Northvolt. The Chinese-owned brand believes that the ceiling has been breached.
Volvo and Northvolt terminate the cooperation on their joint factory in Gothenburg. Volvo buys Northvolt out of NOVO Energy, the joint venture that runs the plant. The reason for the breach is that Northvolt has not complied with its financial obligations, Volvo states.
Northvolt is in a crisis that has led to Volvo now canceling all cooperation with the battery company. Volvo will exercise its right to buy Northvolt's shares in NOVO Energy.
"This action comes after Northvolt AB breached the parties' shareholder agreement by failing to fulfill its obligations regarding financing," Volvo Cars said.
The future of Volvo's battery factory in Gothenburg is now uncertain. Volvo is investigating how they will continue operations without Northvolt, and it is not certain that the factory will produce batteries in the future.
– Volvo Cars assesses the potential consequences of this development for NOVO Energy and reviews future scenarios to protect the investment.
READ ALSO: Audi closes car factory – over 3,600 lose their jobs
– The building belonging to NOVO Energy can be multifunctional, and several options are being evaluated on the condition that Volvo Cars reaches full ownership, Volvo Cars states in a press release .
On top of that news, it is now only Volkswagen that owns the majority of Northvolt, which actually still supports the project. However, the Germans have refused to pump more money into the project.
Earlier this year, BMW also broke the contact and a contract with Northvolt in the middle. The agreement between the parties was worth a whopping 14 billion Danish kroner. But the brand from Bavaria got tired of waiting for the batteries that Northvolt had promised. Volkswagen can now do the same. Read more about it here .
As recently as this month, Northvolt was just one day away from being declared bankrupt by the Swedish tax authorities. But on days when a tax payment was due, the factory found the money and thus avoided bankruptcy.
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